“We plan on filing for divorce soon,” a recent email to me from “Benny” stated. “There are some papers my wife, “Laura,” wants me to sign. Could you tell me what they are all about?
“She is financially irresponsible. I give her money to pay taxes and she buys new clothing. We are $50,000 in debt and are constantly getting letters from the IRS about overdue taxes.
“She wants her own condo and claims that by signing these papers I will not have any obligation, as the condo and mortgage will be entirely in her name.”
Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
My response was simple: “Do not sign a thing. Scan and send me those documents.”
“I Have Applied for a Mortgage...”
Soon I was looking at an interspousal transfer grant deed, “To create separate property for the wife...and to relinquish the husband’s rights and interest in the land described and placing title in the name of the wife alone.”
But then came a document titled “Borrower’s Certification and Authorization,” which stated, “I/we have applied for a mortgage through XYZ Mortgage Corporation.” Two signatures were required: Borrower and Co-Borrower. That meant Benny and his wife, not just the wife alone, were financing the purchase of her condo.
So Benny’s financially irresponsible wife had also proven herself to be a con artist, trying to get him to be on the loan for her condo and surrender any legal interest in it.
“Benny, if you sign these documents, you will be on the hook for those payments she will certainly refuse to make. Do not sign a thing!” I warned, “The lender will chase you for the payments!”
He refused to sign, and she went ballistic, caught in her lies. I just hope that Benny will not cave in out of a desire to “smooth things over,” as he admitted to often having done in the past.
When You Know the Marriage Isn’t Going to Last
I ran Benny’s story by Hanford, Calif.-based family law attorney Jeffrey L. Levinson, asking, “For anyone in this situation, how can you avoid getting financially burned?”
“When you know that the marriage is not going to work, you must take steps to protect yourself,” Levinson began. “The first thing to do is to find counsel.” He says you need to have an open and frank conversation with him or her, and your practical focus at this stage should be:
- Do not sign any documents just before you file a petition for dissolution.
- Show anything that you are asked to sign to your attorney.
Next, Perform an Inventory of Everything You Have
As an attorney who has practically lived in divorce court for over 30 years, I can’t begin to tell you how often I’ve heard, “I just left and when I wanted to get my stuff, it had vanished.”
To prevent this, Levinson says, “You absolutely must do an inventory of everything you own or owe money on.” Focus on large, high-value items, including:
- Homes and mortgage information.
- Credit card debt, bank statements, retirement plans.
- Vehicle registration and debt.
“Analyze everything that you own together or separately and make copies of everything — of all relevant documents showing ownership and title. Make copies of tax returns and other financial instruments to provide to your lawyer.”
Lawyers are often asked, “We have a joint bank account. May I remove money from it?”
Levinson replies, “Yes, as long as there is no court order barring you from doing that, you are free to take half of the money and open your own bank account without your spouse’s signature. You have to be proactive.”
Before You Walk Out of the House for the Last Time
Levinson suggests that you ask yourself this question before you walk out of the house for the last time: “Is there anything you want to keep?”
If the answer is yes, then most family law attorneys will advise that you take that item now unless it will cause a huge fight. If you must leave it, shoot a video of it in the house to prove it existed. If you do not take steps to either remove it or show that its direct loss is the fault of your spouse, just remember these words, “I can’t find it.”
“Realize that you are ending a partnership, and, as Levinson points out. “You must take necessary steps to have information available to you to dissolve the partnership. Think in terms of terminating a business transaction. Again, you’ve got to be proactive.”
Concluding our interview, Levinson observes that, “Family law attorneys often hear, ‘I don’t know what my spouse earns.’ So, get a copy of your tax returns before you leave the house for the last time. You need that data available.”
-
With Fixed Indexed Annuities, Zero Is Your HeroFixed indexed annuities are retirement tools that can offer potential growth as well as principal protection by limiting market risk. Here's how they work.
-
Before Buying Your First Home, Get These Three Ducks in a RowWith mortgage rates higher than we're used to, making sure you can comfortably afford to buy your first home is more important than ever.
-
With Fixed Indexed Annuities, Zero Is Your Hero
Fixed indexed annuities are retirement tools that can offer potential growth as well as principal protection by limiting market risk. Here's how they work.
-
Before Buying Your First Home, Get These Three Ducks in a Row
With mortgage rates higher than we're used to, making sure you can comfortably afford to buy your first home is more important than ever.
-
From Trusts to Taxes: Is Your Estate Plan Ready?Leaving a legacy can't be left up to chance. You need an estate plan that takes advantage of all the tools available, including possibly an irrevocable trust.
-
Three Key Items to Evaluate When Choosing a 721 ExchangeA REIT's debt levels, interest rate issues and financial performance are important factors when deciding which DST with a 721 exchange exit strategy to invest in.
-
Choosing a Corporate Trustee: The Pros and ConsThe impartiality and dependability of a corporate trustee are key benefits, but some of the disadvantages could be deal-breakers.
-
The FDIC Is From the Government and Really Is Here to HelpThe FDIC has spent more than nine decades in action, so let's take a look at what it does and why it's so important for consumers.
-
Four Signs It's Time to Sell a StockThere's plenty of advice out there on when to buy a particular stock, but developing a strategy for holding or selling an investment is equally important.
-
Interest Rate Cuts and Inflation: What's Really Going On?For more than two years, we've heard a steady drumbeat of news highlighting inflation and its impact on interest rates. The correlation seems clear, but the issue is actually more complex.
